Complaining about the cost of college is arguably the most popular activity in America right now. For good reason. College is really expensive. The rate of inflation for college tuition is at least twice what normal inflation is. Which is why the student loan average is now $35,000 a student. And just a side note about averages: My wife and I both graduated with zero dollars in student loans which means two other students graduated with $70,000 in student loans to average out to $35,000. $70,000!
But here's the thing, everyone knows college is expensive, no one should be surprised by it. Yet, each fall parents of incoming freshman throw up their hands and declare it's impossible to save enough, and student loans are the only option. But are they really? Why can't parents save enough? Is it really impossible, or is it just an excuse?
I've got a theory based on my interactions with hundreds of parents in America. Saving for college isn't impossible, because saving for college isn't about money, it's about spending behavior.
Before I get a bunch of angry emails, let me clarify, I'm speaking directly about middle-class to upper-middle class families. Today's upper middle class families are being pulled in all sorts of directions, or at least they feel like they are. There is the self-inflicted pressure to have the best house on the block. The self-inflicted pressure to have kids in every activity and sport available. The self-inflicted pressure to have the newest and most unlimited technology plans. When your budget is tapped out by these new "necessities" it's no wonder you can't afford to save for college.
Then there's retirement. Retirement has changed a lot, but blaming the changes in retirement on your lack of college savings is misguided. Yes, it's likely you and only you are responsible for saving for your retirement. But be honest with yourself, it's not like you are killing it at saving for retirement either. If you were, it might be some excuse for your lack of college funds, but even then it's a stretch.
So what's the solution? Start a 529 plan. It doesn't matter if your kid is 15, start now. Yes, it's too late to fully fund their schooling, but at least get something put away. And if you and your kid arrive at high school graduation knowing full well the only option for college is student loans, expand what you think of as options. Go to community college for a year or two and transfer to your school of choice later. Get a job and work your way through school. Live off-campus to save money. We've become enamored with this idea of college being an experience. And if you can afford for it to be then great, but a $35,000 experience is something you work for, not something you can just deal with later.